Option-Game Theory And Its Application On The Price Decision Of Enterprises M&A

M&A project is a crucial way of strategic in vestment in a corporation. After reaching a certain size, a corporation always gets a rapid growth through M&A.M&A is a complex deal, which is involved with many programs, strategies and various laws. Obviously,a factor that can directly affect the success of M&A is the price of the deal. Therefore ,it is critical for a player of M&A how to make the decision of price.M&A price decision means that a player makes reasonable assessment of target firm ,and puts forward the rational price in the deal. This paper focused on it. Because of the potential problems in traditional theory,we presented an in-depth research on player's price decision through the method of Option-Game theories, which is derived from OPT and Game theory. By the way of real option, we valued the Growth option in M&A and gained the better assessment of target firm. On the basis of these analyses, we explored player's price decision under the condition of non-bidder and multi-bidder. So through the model of Game theory we presented the outcome of equilibrium under every kind of conditions and gained the player's price decision in M&A .Then, we explained the period of decision in an assumed M&A case.This paper will be targeted companies offer pricing and mergers and acquisitions into an integrated framework of the analysis, acquisition pricing decisions more scientific and more practical. In view of the M&A market there is a competition, the introduction of competitive bidding auction this merger of the theory to analyze mergers and acquisitions pricing decisions, so that it has more applicability.